SEN. JOHN KERRY, (D-MA): Misleading our nation into war in Iraq makes you unfit to lead our country.

(End videotape)

MR. RUSSERT: ...what effect will the war in Iraq have on the presidential election? With us: He's endorsed George W. Bush, the former speaker of the House, Newt Gingrich. He's endorsed John F. Kerry, the author of "Intelligence Matters," Senator Bob Graham of Florida. And conservative commentator and author of "Where The Right Went Wrong," Patrick J. Buchanan.

Then, the polls show a big post-convention bounce for the president. How can Senator Kerry slow the Bush momentum? With us: Republican strategist Mary Matalin and Democratic strategist James Carville. Carville and Matalin square off on the race for the White House.

But, first, Hurricane Frances came ashore in Florida at 1 a.m. this morning. This was the result: power lines down causing fires; street signs in the street; wind howling, devastation everywhere. Let's go live to Vero Beach on the east coast of Florida. We are joined by NBC's Bob Hager, who's been covering hurricanes for 29 years.

Bob, tell us about Hurricane Frances.

MR. BOB HAGER (NBC News): Well, the surprising thing is just how strong it's been. We're on the back side of the storm right now. It came in at 1 a.m. Eastern time with winds at Category 2, 105 miles an hour. Now, it's moving across Florida. As you can see, it's powerful even on the back side. It's been downgraded now to a Category 1 with winds of 95 miles an hour.

But I think because of the sheer duration of this storm, there'll be significant damage. Right now it's still blowing. It's much too dangerous for anyone to get out and look around. So it's going to be impossible to assess damage till much later on today. But figure with all that property--they call this the Treasure Coast, so populated, so much building activity up and down the Barrier Islands of the east coast of Florida, damage here is going to be significant. The storm surge was about six feet. We've already had eight inches of rain; we'll probably get 10. Some local areas, they say, could get 20. So this was a big storm, even though it was a Category 2. Tim.

MR. RUSSERT: Bob Hager, please take care of yourself. We'll be talking to you throughout the day on NBC News.

SEN. GRAHAM: Well, we didn't need to have another hurricane. Hurricane Charley was a very high- intensity storm, did a tremendous amount of damage right over the center part of the state. Now, we have this second hurricane, which is going to be a very wet hurricane. So we could have some serious problems. There are apparently already about two million people who are without electricity. There'll be thousands of people whose homes will be damaged. We've got a big challenge ahead of us.

I'd like to just say how much I appreciate the good work that's been done by the federal, state, local officials in preparing for this hurricane and picking up the pieces after Hurricane Charley.

MR. RUSSERT: President Bush, Governor Jeb Bush--will they receive high marks for their work, and will that be a political boost for the president?

SEN. GRAHAM: Frankly, they deserve to receive high marks. I think they have both acted aggressively, appropriately and are providing a significant amount of comfort as well as direct assistance.

MR. RUSSERT: And we hope and pray that people of Florida will get through this hurricane in a safe way.

Let me turn to the subject at hand: the war in Iraq, war on terrorism. These are the latest numbers of U.S. military casualties in Iraq: killed, 979; wounded and injured, 6,916--1,100 wounded or injured in August, 2004, the highest number since the war began.

Newt Gingrich, the former speaker, let me bring you into our conversation. Will those numbers, that toll of killed and injured and wounded American solders, have an impact on the presidential election?

FMR. REP. NEWT GINGRICH, (R-GA): I think absolutely, Tim. You can't be in the middle of a real war and have real effort by your enemy to kill you and not have some impact. The Civil War had a big impact on the election of 1864. The Second World War had an impact on the election of 1944. This is a war election, this is not a peace and prosperity election. And the country will have to render summary judgment: Is President Bush right that this is a necessary war? Is he right that we are doing the difficult, painful, long-term things, or, in fact, are Senator Kerry's critiques more accurate? I think this is the central question of whether or not the commander in chief should stay or whether or not you need a new commander in chief.

MR. RUSSERT: You believe it is a necessary war?

MR. GINGRICH: I believe it is unequivocally a necessary war. And I think what you just saw in the Chechen attack on Russians is a reminder of how absolutely right Senator John McCain was on Monday night to say, "The question is not war or peace. The question is war or something much worse." And let me just say, before we go to our two good friends, imagine a world in which Saddam Hussein was still trying to get weapons; imagine a world in which Saddam Hussein was still paying $25,000 per suicide bomber; imagine a world in which terrorists were still active, trying to organize themselves in Baghdad without this kind of counteroffensive. I think that would be a much more dangerous world than where we are now.

MR. RUSSERT: Pat Buchanan, in your book, "Where the Right Went Wrong," you write the following: "In 2003, the United States invaded a country that did not threaten us, did not attack us and did not want war with us to disarm it of weapons we have since discovered it did not have. ... Now our nation is tied down, our Army is being daily bled in a war to create democracy in a country where it has never before existed. ... With the guerrilla war, U.S. prestige has plummeted."

You go on to write that Iraq was, "...the greatest strategic blunder in 40 years, a mistake more costly than Vietnam."

MR. PAT BUCHANAN: Certainly, Tim, I believe it is an unnecessary war; it is an unwise war. The United States, by invading that country and taking over its capital, we have inflamed the entire Middle East and Arab and Islamic world. American prestige and support for the president and the United States has never been lower in that part of the world. And Mr. Rumsfeld's question has been answered.

He asked, "Have we been creating more terrorists than we are killing?" When he said that, some 5,000 insurgents were said to be in Baghdad by General Abizaid. The latest count is 20,000. I believe this war itself is creating a pool, a spawning pool out of which Osama bin Laden can draw recruits. I think that there has been nothing that has done more to put Osama bin Laden, if you will, in the mainstream of the Arab cause of nationalism than what appears to the Arabs to be to be a near-imperial adventure by the United States in Iraq.

MR. RUSSERT: Senator Bob Graham, your candidate for president John Kerry said, even what he knows today, no finding of huge stocks of weapons of mass destruction, he would still vote to authorize the war in Iraq. Is that a position that would resonate with the Democratic constituency?

SEN. GRAHAM: What Senator Kerry has said is that if he had taken the country to war based on what he knew at that time, he would have taken it to war in a different fashion; it would have been with allies, with a clear plan of occupation and exit from Iraq. I would completely agree with what Pat has just said and would add this, that the war in Iraq has been a distraction from the real war on terror. It was interesting at the Republican convention this past week, you did not hear the words Hamas, Hezbollah, and very seldom Osama bin Laden and al-Qaeda. There has been an effort made to subvert the real terrorists, the terrorists who have killed thousands of Americans and thousands of our friends and allies, that has been, to me, one of the greatest costs of this war in Iraq. It has made us less safe from terrorism, not more safe.

MR. RUSSERT: But this is what you said about--we're in the middle of a presidential election and the New York Times quotes you today as saying this, "The people are there, the candidate is there; it's the reason to vote for the candidate that's still a little out of focus. ... It's become a referendum on the challenger."

Should Senator Kerry be very explicit as to exactly what he would do now with the war in Iraq?

SEN. GRAHAM: He has been explicit and he needs to continue that. I would suggest he also needs to say that the issue is now beyond Iraq; it is now Iran; it is now North Korea. Will we have a president for the next critical four years who will apply the same standards of judgment, or lack of judgment, preparation or lack of preparation, to wars in those countries that we have seen in Iraq?

MR. RUSSERT: In your book "Intelligence Matters: The CIA, The FBI, Saudi Arabia And The Failure of America's War On Terror," you write the following. About a February 2002 meeting with General Tommy Franks, "Here, General Franks, a four-star general and commander of CENTCOM, was laying out for me how he would fight a true war on terrorism. Instead, his men and resources were being moved to Iraq, where he felt our intelligence was shoddy. This admission was coming almost 14 months before the beginning of combat operations in Iraq and only five months after the commencement of combat in Afghanistan. ... And though President Bush packaged action in Iraq as part of the war on terror, the truth was that not only was it not part of the war on terror, it actively and demonstrably detracted from the war on terror."

And yet General Franks addressed the Republican convention in New York and he praised on President Bush.

SEN. GRAHAM: I reported, with as much precision as I can, what General Franks told to me in that meeting at Central Command in February of 2002. He laid out a very precise strategy for fighting the war on terror. First, we should win the war in Afghanistan; second move to Somalia, which as he described was almost anarchy but with substantial number of al-Qaeda cells, then to Yemen, and that we should be very careful about Iraq because our intelligence was so weak that we didn't know what we were getting into. And then, interestingly suggested that several European countries knew more about the realty of the situation in Iraq than we did, and that we should look to them for advice.

MR. RUSSERT: Pat Buchanan, we are now hearing on the wires that Mr. al-Douri, the number-two to Saddam Hussein, has been captured. So we now--and there he is on the screen. We now have a situation where Saddam Hussein and his number two are in captivity. Is the world not safer without them presiding over the country of Iraq?

MR. BUCHANAN: Well, certainly, the Iraqi people are probably safer as a consequence of the American liberation and overthrow of Saddam Hussein. The problem, Tim, is this: Now, that Saddam Hussein is gone, what we have is a situation in Fallujah and Ramadi where Sunni fundamentalists are in control and the Shias are rising up in the south, and we--and Americans are dying, and we do not have enough troops, in my judgment, in place to win this war. What you could have here and what the risk is: that having overthrown this one devil, we could have seven devils enter in his place. This could turn into a failed state in chaos and civil war, where the United States is forced out or either forced to double our troops in there. And if that happens, Tim, we've got ourselves a hellish situation there. It was not a problem. Saddam was a criminal and a thug and a brute, but he was no threat to a country that flew 40,000 sorties over Iraq in 10 years. He did not shoot down a single one.

MR. RUSSERT: Would you send more American troops or would you withdraw?

MR. BUCHANAN: This is the question that, I think, should be put to John Kerry and the president of the United States in the debates: "Mr. President, if John Abizaid comes to you and says, `We can't do it with the present complement, we need 75,000 more American troops'--what would you do, John Kerry? What would you do, George W. Bush?" If it were up to me, Tim, I think I would execute a strategic withdrawal from Iraq. I think it was a terrible mistake. We're going to pay consequences one way or the other. And my feeling is probably it would be better for us in the long run if we withdrew.

MR. RUSSERT: Newt Gingrich, strategic withdrawal?

MR. GINGRICH: Well, let me just go through--because several things shouldn't be left unchallenged. Senator Graham talks about Hamas and Hezbollah. The fact is, Saddam Hussein was paying $25,000 to the family of every Hamas and Hezbollah bomber. The fact is that Abu Nidal was a terrorist who was in Baghdad. The fact is Ansar al-Islam, which is a terrorist organization, was in Iraq. This is part of the war on terror.

Second, as you point out, General Tommy Franks apparently thought this was a very real part of the war on terror, because he spoke at the Republican convention endorsing the president.

Third, Pat Buchanan just described his own formula for creating precisely the failed state he talked about. We have a strategy under way. It's a strategy of creating an Iraqi interim government. It's a strategy of an Iraqi election. It is a strategy of building an Iraqi army. There is a new battalion being trained every two weeks by General Petraeus. They are coming on-line. You saw more and more impact by the Iraqis themselves defending their own country. When we stay and we have courage, as we did in South Korea, as we did in Germany, as we did in a number of countries, we eventually help people become democracies. When we cut and run because we lack the willingness to stand and be the great power we are and to stand with the people of the country, then, in fact, we leave them behind, and we leave them in agonizing situations, as we did in Somalia in 1993.

MR. RUSSERT: Mr. Speaker, as you well know, Jim Schlesinger, a former Republican secretary of defense, looked into the prison abuse issue for the Pentagon, an independent study, and he reported this: "In Iraq, there was not only a failure to plan for a major insurgency, but also to quickly and adequately adapt to the insurgency that followed after major combat operations."

Will you acknowledge that there were serious misjudgments, miscalculations made in the war in Iraq?

MR. GINGRICH: Tim, on your show five or six months ago, I said we made a huge mistake in June of last year by not moving promptly to an interim Iraqi government, and it was an enormous mistake to have an American and Iraqi television. So I can cite clips from MEET THE PRESS where I've already agreed with Jim Schlesinger before his report. I think it was a mistake. I think Tommy Franks' campaign was brilliant. And had we continued to move as we had planned to an Iraqi interim government and to using the Iraqi regular army in June of last year, we would be in better shape today.

Having said that, the president has moved in the right direction. We are doing the right things. And the real question--I think Pat Buchanan put it pretty clear: Would John Kerry, as commander in chief, hang tough until the Iraqi people have a free country, or would he find some excuse to withdraw, even if it led to a dictatorship or, even worse, to a vicious civil war?

MR. RUSSERT: Might we need more American troops, Newt Gingrich?

MR. GINGRICH: We might and I think the president will say that he will do what General Abizaid recommends, but we do not need a 500,000 or 600,000-man force. That is exactly wrong. What we want to do is have Iraqis patrolling the streets so that they're the enforcers and the American troops are the reinforcers. We're moving in that direction. Sometime in the next six months, we're going to be there and I think over time we're going to grind down the terrorists and the evil people.

Remember, there were 300,000 dead Iraqis in unmarked graves. This was an evil regime and some of the evil men still have to be hunted down. But I'm with the Iraqi people and I favor our staying with them as we have in South Korea, in Germany, in El Salvador, in Nicaragua. There are a lot of places in the world free today because the American people had the courage to stand next to the people who wanted to be free.

MR. RUSSERT: Senator Graham, should we send in more American troops to Iraq or should there be a strategic withdrawal?

SEN. GRAHAM: I would agree with Speaker Gingrich. If the commander in chief in Iraq feels that more troops are necessary and we are unable to fill that need either from Iraqis who are prepared to assume more of their defense of the country or international forces, then I think we don't have any choice. To me, the real issue is the decision-making that led us into the war in Iraq and the decision- making that is going to be in place for future conflicts in Iran and North Korea.

SEN. GRAHAM: I think the key question ought to be which of the many enemies that we face around the world, particularly in the Middle East and central Asia, has the greatest potential to kill Americans. And there is no question that greatest enemy is al-Qaeda and the other international terrorists. They should be our primary focus and not the distraction of, as Pat has said, a foe but a foe that was contained.

MR. BUCHANAN: Who promised us, Tim, a cakewalk? Who promised the president a rose garden? Who failed to prepare for what would happen after we took Baghdad and Iraq? Who are the men responsible for this and why has the president of the United States not removed any of them? Most of them over in the Pentagon are the neoconservative war hawks who planned, prepared and propagandized for a war in Iraq as far back as 1996. This was their class project. I believe they imposed it upon the president. The president bears full responsibility for accepting it. But why he has not removed these people from office, I cannot for the life of me understand.

MR. GINGRICH: Tim, listen, can I just interject something here for a second because I think it's too easy to just chant al-Qaeda and ignore things. If we end up with a North Korea selling nuclear weapons to terrorists or we end up with an Iran giving nuclear weapons to terrorists or if Saddam's 12 laboratories, which we know existed now--we found all 12 of them--12

laboratories run by a secret police to develop biological weapons and been giving to terrorists, no one should underestimate why the president said "axis of evil" and how dangerous these three rogue states were, these three rogue dictatorships were if their weapons end up in terrorist hands.

There is a general strategy in what the president is doing. He announced it clearly in October of 2002 in a national security document. It is available to the public and we just have to tie together nuclear weapons in North Korea, nuclear weapons in Iran, the potential for nuclear, chemical and biological weapons in Iraq and the fact that they would clearly give these weapons to people who have said publicly they're prepared to kill million of Americans. That's a public statement.

MR. RUSSERT: Senator Graham, in your book, you write that you were given, in effect, two different intelligence estimates of Iraq's capability. Now, we're confronted in a world with a growing concern with Iran and with North Korea. Do you have the confidence that the American people and the world would listen to the United States if we came forward and said, "Iran has a nuclear program and a threat. It must be taken out. North Korea must be taken out," based on the whole weapons of mass destruction controversy regarding Iraq?

SEN. GRAHAM: If there's one lesson that comes from both 9/11 and the Iraq War is the unreliability of American intelligence and I am distressed to say that but it is the truth. I think we have an urgent need to reform our intelligence agencies so that we can recapture the credibility of the world and we're feeling it already today. We don't have to get into an Iran situation. The Chinese are questioning our intelligence relative to North Korea, which is affecting the negotiations that are going on to try to disarm North Korea from its nuclear capabilities.

MR. RUSSERT: ...have written something in your book that I think is going to be quite controversial and I want to put it on the screen and share it...

MR. BUCHANAN: Sure.

MR. RUSSERT: ...with you and our viewers and give a chance for our group to respond to it. "U.S. dominance of the Middle East is not the corrective to terror. It is a cause of terror. Were were not over there, the 9/11 terrorists would not have been over here. And while their acts were murderous and despicable, behind their atrocities lay a political motive. We were attacked because of our imperial presence on the sacred soil of the land of Mecca and Medina, because of our enemies' perception that we were strangling the Iraqi people with sanctions and preparing to attack a second time, and because of our uncritical support of the Likud regime of Ariel Sharon" in Israel.

Are you suggesting that our alliance with Israel is one of the reasons that we were attacked on September 11?

MR. BUCHANAN: Sure. That's one of the reasons given by Osama bin Laden. In his fatwa of 1998, he wrote that there are three causes of the problems and three causes for a declaration of war by all Arabs and good Muslims against the United States. One, America's imperial presence on the sacred soil of Saudi Arabia. Secondly, the sanctions policy against Iraq which was persecuting and basically starving, he said, the Iraqi people, and we were planning another invasion. Third is the United States' uncritical support of the Ariel Sharon regime in Israel, which he argued is persecuting the Palestinian people.

In my judgment, Chris, this one-sided support for Sharon, the refusal to condemn that wall snaking through the West Bank, the agreement to support Sharon's claim to virtually half of the West Bank, this has caused enormous hostility and animosity and hatred for this country in that part of the world, not just among the Palestinians. And if we want to drain off some of this hatred, this venom against us, we have got to adopt a more evenhanded policy here. We have got to stand up for the same rights for the Palestinian people, a homeland, a nation, a state of their own, a viable one, on the land their forefathers farmed for a thousand years, because those are first our principles and secondly, that is in the national interest of the United States of America. I don't care what Ariel Sharon believes.

MR. RUSSERT: They are not attacking us because they hate us and hate our culture?

MR. BUCHANAN: This is the fundamental point. Are they attacking us because of who we are and what they believe or are they attacking us because of what we do? I believe it is our policies, not our principles that are causing these attacks. Osama bin Laden wasn't sitting in some cave in Afghanistan and stumble on the Bill of Rights and go bananas. It is because of what we are doing. Most fundamentally, it wasn't Israel number one. Number one, Saudi Arabia, female soldiers, American soldiers sitting there on the land of Mecca and Medina.

MR. RUSSERT: Senator Graham, you buy that theory?

SEN. GRAHAM: I think that our policies have been the key to the terrorist motivation. In the book, you'll see several discussions with leaders in Egypt and Syria and Lebanon, and they all point to the urgency of the United States being fully engaged with the Israeli-Palestinian conflict to try to bring it to a resolution and a concern that President Bush has not been significantly committed to achieving that goal.

MR. GINGRICH: Well, let me go through the facts. President Bush is the first American president to actively advocate a Palestinian state but he said it has to be a Palestinian state based on democracy and a willingness to co-exist with Israel. Second, what Pat said is true but people have to listen carefully to what he said. He said basically if we would pull out of the biggest oil region on the planet, allow people like bin Laden to dominate the oil supply of the entire industrial world, give up the right to have female American soldiers go in places that bin Laden defines--and remember, the al-Qaeda irreconcilables define Spain as al-Jazeera and argue that they have a right to reclaim Spain, and some of them have demand that Rome become a Muslim city. So it's a little bit too easy to say, "Gee, if only we betrayed Israel and abandoned democracy in the Middle East and withdrew from the region, everything would work."

Try to describe a world in which for the last 35 or 40 years, the U.S. has not provided stability for world's oil supply and you're describing a world where you have $200 or $300 a barrel gasoline, and, by the way, where all the money ends up going into the pockets of people who hate us, who've already publicly said Europe comes next.

MR. BUCHANAN: Well, personal...

MR. RUSSERT: Mr. Speaker--one second, Pat. Mr. Speaker, I want to ask you if your reaction to stories in the papers about an investigation of the Pentagon and also questions have been raised about the Defense Policy Board on on which you serve. The office of Douglas Feith and others are--there's questions being asked about secrets that may have left that particular office or the Defense Policy Board and been given to APAC, a lobbying group allied with Israel.

MR. GINGRICH: I think that it is very worrisome that some security people, whether they're at the CIA or the FBI, are trying to destroy careers by leaking to the press allegations that are untrue. You may have just noticed, by the way, that Ahmed Chalabi, after a six-month campaign by Ambassador Bremer and the Coalition Provisional Authority, Ahmed Chalabi was just cleared, something which didn't get quite the same coverage as all of the vicious and dishonest charges.

Now, if what we're seeing is a strategy of smearing people out of public life by using the FBI and the CIA, I think that's something the Congress should investigate. If somebody's guilty, fine, arrest them, indict them, convict them. But to have people who are supposed to be in charge of security out smearing people, I think makes one worry about the protection of individual liberty and the protection of individual innocence in this society.

MR. RUSSERT: Pat Buchanan.

MR. BUCHANAN: We also need to investigate whether there is a nest of Pollardites in the Pentagon who have been transmitting American secrets through APAC, the Israeli lobby, over to Reno Road, the Israeli embassy, to be transferred to Mr. Sharon. Now, I did not know until this weekend's stories in The Washington Post that this is exactly what is being talked about; that certain individuals over there in Mr. Feith's shop or beneath him have been transmitting these secrets.

Now, the FBI have been asking questions. There are no conclusions. No one should assume guilt on anyone's part. But if this has been going on, Tim, we are getting dangerously close to the T-word. And I would urge the president of the United States to get out in front of this, to take this investigation away from Mr. McNulty and give it to Patrick Fitzgerald and let them look into it because if the president can-- I'm sure the president has no involvement in this. But questions have been raised, and this is not something on the Internet. This is The Washington Post doing this, moving all this around, and so I think there clearly needs to be an investigation.

MR. RUSSERT: Senator Graham, I'll give you the last word.

SEN. GRAHAM: And I would say that one thing this administration needs to do is to come clean with the American people. They are dramatically overusing classification, not for national security reasons but in order to protect political embarrassment. I think we lay out the case in this book of the extent to which Saudi Arabia was a key part of making 9/11 happen, and yet this administration has taken every step to obfuscate, avoid and cover up Saudi Arabia's actions.

MR. RUSSERT: To be continued. Bob Graham, new s--book, "Intelligence Matters: The CIA, FBI, Saudi Arabia, the Failure of America's War on Terror." Pat Buchanan, "Where The Right Went Wrong." And I should add Newt Gingrich has a book, "Grant Comes East." If you like the Civil War, Professor Gingrich is available.

Coming next, Bush vs. Kerry--58 days to go. The state of the race through the eyes of Democrat James Carville, Republican Mary Matalin. They are next right here on MEET THE PRESS.

(Announcements)

MR. RUSSERT: Election Day is just 58 days away. James Carville, Mary Matalin--they are next.

(Announcements)

MR. RUSSERT: And we are back. Welcome, both. Before we talk about Kerry-Bush presidential race, James Carville, you worked for President Clinton, ran his campaign.

MR. JAMES CARVILLE: Right.

MR. RUSSERT: Have you had a chance to talk to him recently?

MR. CARVILLE: All night last night and Friday night, too. He's in--right now, speeches--he just ran-- ago--he wants to get this surgery over with. He thinks that he can be back on the campaign trail in four or five weeks.

MR. RUSSERT: When's the surgery going to take place? Do you know?

MR. CARVILLE: I think they're saying early next week, so I assume it's going to be Monday or Tuesday, or something like that. But last night, he was having dinner in his room with Senator Clinton, Chelsea. And he said, "Call me back. It's not like I can go anywhere."

MR. RUSSERT: And President Bush, Vice President Cheney, John Kerry have all called the president...

MS. MARY MATALIN: Right.

MR. RUSSERT: ...wished him well, and so do we all here at MEET THE PRESS.

Let's turn to the issue at hand, the campaign for the White House. Here are the latest polls. After the Republican convention, both Time and Newsweek: Bush, 54; Kerry 43 is Newsweek; the Time poll, 52, Kerry 41. James Carville, John Kerry behind by 11 points. Is his candidacy in trouble?

MR. CARVILLE: Well, sure. He's had a bad August. And--but it's eminently fixable. I think he's starting to do better. The question they've got to point to is--you know, the country has had a bad August. And I think once they focus on that, from unemployment number to poverty numbers to more soldiers in Iraq being wounded to everything else--and I think that Senator Kerry is putting things in place that's going to improve his campaign. I expect that to happen in the next three days. President Bush is doing nothing to put policy into place that's actually going to improve what's happening in America, and I think that's a big difference. And once that happens, going to do fine. And I fully expect, if you look at the totality of the polls, that this race will be single digits here next week.

MR. RUSSERT: But if you look inside these numbers, James Carville, here is the president's approval rating. In Newsweek it's 52 approval; Time has it at 55. A president who went into...

MR. CARVILLE: Right.

MR. RUSSERT: ...an election with an approval rating of above 50 percent, has never lost. And look at these numbers: Who's better at handling terrorism or homeland security? George Bush at 60, John Kerry, 32; a 28-point advantage.

MS. MATALIN: Yeah.

MR. RUSSERT: Who's better at handling the war in Iraq? Fifty-five to 37.

MR. CARVILLE: You know, Tim, when Kerry gets back--this week there was a study by the Royal Institute of Foreign Affairs in Britain, probably the most prestigious foreign policy group in the world, that says basically Iraq is a failure. The best we can hope for is to muddle through. The most likely scenario is that you have a civil war with seven different things. Again, once people focus--this is right after the Republican convention. I'm not going to sit here and spin you--spin Democrats around the country that President--that Senator Kerry's had a good August. He hasn't. But I can tell you this: He knows that.

The difference between him and President Bush is, the country hasn't had a good August, and President Bush doesn't know that. He is talking about progress at a time when they're not creating jobs fast enough to end up with a net job gain at the end of the year. He's satisfied with 800,000 more children in poverty. He's satisfied with a $500 billion deficit. He's satisfied with Medicare--biggest increase in Medicare payments in the history of the program. So the difference between Senator Kerry and President Bush is, Senator Kerry is not satisfied with the state of his campaign. He's going to change it. President Bush expresses great satisfaction with the state of the nation.

MR. RUSSERT: Mary Matalin.

MS. MATALIN: Well, also, those internals show that the nation now believes that the president's more likeable, he's a stronger leader, he's more honest, he's more ethical. Whenever they have a candidate like this, they try to blame the campaign. I remember when they did this to Susan Estrich in the Dukakis campaign. They did this to Donna Brazile in the Gore campaign. Now they're doing it to poor Mary Beth Cahill. You'd think they could find a man to throw overboard one of these days.

But the problem in each of those cases is a lackluster liberal candidate who never conveys where he wants to lead the country. That's what we did at the convention. It wasn't that Senator Kerry had a bad August. He has no message. We said this coming out of his convention. They spent all the time attacking Bush or talking about Vietnam. They did not do, as the president laid out, a forward plan for America.

We--and we did have a good August. The economy is improving. It's improved for 12 consecutive months. We lost a million jobs after 9/11. We've inherited a recession; 12 consecutive months of growth. And the unemployment number's at 5.4 percent, a precipitous drop and exactly where was in President Clinton's re-election bid in 1996. We are right where President Clinton was in these polls in 1996, compared to Senator Kerry, who in all of these polls has the worst challenger numbers coming out of his convention and the worst numbers among candidates in general.

MR. RUSSERT: But job growth--as Senator Kerry said the other night, "This will be the first president since Herbert Hoover to have a net job loss during his four-year presidency." Isn't that a problem for the president?

MS. MATALIN: And look what we've come through. We inherited a recession. I will say again we went through a stock bust. We went through corporate scandals and we lost a million jobs within three months of 9/11, a devastating attack on our economy. Because the president acted as fast, as swiftly and as effectively as he did, we were able to stem this recession and can have steady growth. These numbers are exactly what President Clinton's numbers were in 1996 relative to the economy.

MR. RUSSERT: ...isn't the fact that the Republicans have made this election a referendum on the president's handling of the war on terrorism, and Senator Kerry has not made it a referendum on the economy?

MR. CARVILLE: Well, first of all, let me go back. When they're making all these calls to President Clinton, President Bush and Vice President Cheney ought to say, "Mr. President, thank you for $5.6 trillion surplus that you let us squander and blow. Thank you, Mr. President, for having the United States, when we took office, be the most respected nation on Earth, and we've squandered that and we've blown that." So when they make these phone calls, they ought to be honest with President Clinton.

The second point I want to make here is I think that what Senator Kerry needs to talk about is how, because of miscalculations--I would call it incompetence, but we'll leave the word "miscalculations"--in Iraq, we're bleeding $200 billion of taxpayer money while we're watching the biggest increase in Medicare payments in the history of the program. And, you know, I think the president knew that when he spoke Thursday night when he was saying how satisfied he was with everything.

MR. CARVILLE: You know what? I can look back and say, "The authorization vote, had we not gone to war and watched, had we not gone to war, we would have left inspectors in there." We didn't go to war with the right plan, I mean--and that's the point. There was no planning for this. The vice president sat right in this chair and said, "We expect to be greeted with roses." We were going to be liberators. They were told otherwise. Now, the president has admitted that, has admitted that he made this mistake. This is a mistake of a giant proportion. And what's the consequence of this to the American people? We're in a quagmire in Iraq. We're spending money.

MS. MATALIN: Oh, please.

MR. CARVILLE: We've had the most casualties and most wounded in August than of any month since the occupation started, and that's the fact and people are going to focus on that.

MR. CARVILLE: Not at all, because if the war would have been authorized and the president, in the time that he went to war--we knew there weren't--we had a pretty good idea there weren't weapons of mass destruction. Walter Pincus knew it. The Washington Post knew it. The CIA knew it. And so John Kerry would have never gone to war when he was given the lighter information from March.

MR. RUSSERT: Mary Matalin...

MS. MATALIN: Oh...

MR. RUSSERT: ...when the death total hits 1,000, in all likelihood in the next few weeks, the wounded and injured, over 7,000, will that not resonate politically?

MS. MATALIN: Iraq is a critical element of the global war on terror. Senator Kerry has--although he's had eight distinct positions on Iraq, added another one yesterday, he is exactly where President Bush is on Iraq, including how many forces--again, having four different, distinct positions on how many forces would be there. Where Senator Kerry and President Bush differ is the critical going-forward piece of the global war on terror, and that's what we're in. We are in war. The senator said at his convention that he would respond with certain and swift action after an attack. The centerpiece of the Bush doctrine, the centerpiece of responding to Islamic fundamentalism, is to pre-empt an attack, is to prevent an attack. That's the forward posture, and spreading freedom in the region. It needs to be transformed. This president has a plan for stability, for security and for peace. He also has a domestic agenda, which Senator Kerry has not laid out.

MR. RUSSERT: After your former boss, Vice President Cheney, spoke on Wednesday night, John Kerry on Thursday had this to say. Let's watch.

(Videotape, September 2, 2004):

SEN. KERRY: The vice president called me unfit for office last night. Well, I'm going to leave it up to the voters to decide whether five deferments makes someone more qualified than two tours of duty.

MS. MATALIN: It's a flailing campaign. The vice president said, specifically said, in his remarks that he honored John Kerry's service, for which he got an applause line which we did not expect. What he said he questioned was not his service, which he honored, but his judgment. He has been on the wrong side of national security issues throughout his 20 years in the Senate. We do question his judgment, we do question his going forward.

And the reason we're ahead--although it's going to tighten up again--the reason we're ahead is because this vice president, like the rest of the convention, spent 60 percent of his speech talking about the president's plan for the future, the century of of liberty. Senator Kerry--he did not attack Senator Kerry, did not say the things Senator Kerry's saying, and Senator Kerry's going to stay right where he is if he keeps attacking Dick Cheney instead of spending his time putting together some plan for leading America.

MR. RUSSERT: But, Mary Matalin, you will you will acknowledge that there were a lot of comments made about Senator Kerry's fitness to be commander in chief at the Republican convention. Here's Zell Miller, Democratic senator from Georgia, addressing the Republican convention.

(Videotape, September 1, 2004):

SEN. ZELL MILLER, (D-GA): This is the man who wants to be the commander in chief of the U.S. armed forces? U.S. forces armed with what, spitballs? For more than 20 years on every one of the great issues of freedom and security, John Kerry has been more wrong, more weak and more wobbly than any other national figure.

(End videotape)

MR. RUSSERT: James Carville you ran that man's campaign for governor of Georgia in 1990.

MR. CARVILLE: Right, I did. It's a shame they put that poor man out there in the twilight of his career with a bunch of half-truths. Then they put him on TV after, out there making a fool of himself, and they're showing how he said, "Well, you said Kerry did this." It's the very thing that Dick Cheney recommended. "You said that he called them occupiers." In fact, President Bush had called them occupiers on three separate occasions.

You know, it's a shame, because Senator Miller's had a distinguished mid-career, and I'm very sad for him and the people that work for him that he's going to be remembered, as Joe Klein said, you know, probably the most, you know, hate-filled speech that he's ever seen at a convention. But the problem is, how does a man who sits on this thing, the vice president, who says that we expect to be greeted with roses and you said--you asked him in a follow-up question, "Well, suppose there's insurgents?" He said, "Tim, we don't expect that." How could he possibly, possibly question John Kerry's judgment about being fit to make decisions as a commander in chief?

The record of this administration is already out there. The president has admitted--and when it comes to the war on terror, in June, President Bush said, we can win the war on terror. By August, he had changed his mind and said we can't win the war on terror. So I think there are legitimate questions about judgment. I think there are legitimate questions that don't relate to what happened in Vietnam or not. But they relate to the record of this administration, the miscalculations, the errors and they are all in that report from this royal institute in London, that we've already lost this. We're not going to have a democracy there.

MR. RUSSERT: Mary Matalin, the vice president did say we'd be greeted as liberators, and now, Jim Schlesinger, Republican secretary of defense said that we are unprepared for the insurgency.

MS. MATALIN: We have never, ever, in our history or any history in war, found on the ground plans that went exactly as were planned. It's called the moment of contingency. We have said, the president has said, that the march to Baghdad was completed more expeditiously than had been expected. And it is true that Iraq's become a magnet for all the terrorist, and we do want to fight them there. We don't want to fight them here. And we are winning. This Iraq is in a relatively short period of time on the road to self-government.

MR. RUSSERT: Senator Miller, spitballs, weak, wobbly. Was he over the top?

MS. MATALIN: No, this is--you know, Senator Miller is a man of great passion. If you look at his 1992 keynote Democratic convention speech, he was equally passionate. This is a man who is angry at his party, his party who left him. He is a delightful and loving and wonderful man who officiate at our wedding.

MR. CARVILLE: I love Senator Zell. I'm just so angry at what those cynical Republicans did to him, putting him up. and making him stay stuff that is indefensible.

MS. MATALIN: Well, you know, Senator Miller...

MR. CARVILLE: ...sticking him on TV when he was questioned on it...

MS. MATALIN: Senator Miller, since he's been in office, has been with the president. I saw him regularly on the Hill when I would go up there with the vice president. He was disappointed with his party on economic issues, on these issues of war and peace. He is a wonderful senator. He is a passionate man, brought just as much passion to the Democratic convention in 1992 and these guys just don't like the truth.

MR. RUSSERT: We've got to...

MR. CARVILLE: The difference is when Paul wrote Senator Miller's speech in '92 it was based on fact. When Karl Rove wrote Senator Miller's speech in 2004...

MR. RUSSERT: We have to take a quick break. We'll be right back with a lot more of James Carville and Mary Matalin, the race for the White House, 58 days to go, after this.

(Announcements)

MR. RUSSERT: And we are back.

Mary Matalin, James Carville referred to this headline in the paper: Medicare premiums to rise by 17.5 percent--the biggest in 15 years for seniors to be paying for Medicare. The Kerry campaign is releasing this ad today. Here's part of it.

(Videotape, Kerry-Edwards '04 ad):

Announcer: George Bush touting his Medicare bill to the nation.

PRES. BUSH: I believe we have a moral responsibility to honor America's seniors. Now, seniors are getting immediate help.

Announcer: The very next day George Bush imposes the biggest Medicare premium increase in history while prescription drug costs still skyrocket. The wrong direction for America.

MS. MATALIN: Well, this president has been the first president to put in place Medicare reform with prescription drugs--it just started in June, and more seniors are taking the opportunity of this reform. But, more importantly, the president laid out very specific elements for health savings accounts, associated health plans, tort reform--there's $100 billion lost to frivolous lawsuits--very specific elements to improve health care and Medicare in this country. Senator Kerry didn't do that. He talked about something that's been in his platform since 1948--very backward-looking plans. The president's looking forward, agenderforamerica.com.

MR. CARVILLE: Tim, I want to make a point here. If the president knew about this increase on Thursday night and gave that speech, he misled this country. And somebody, some enterprising journalist, ought to find out exactly what he knew, because if he got up there and said what he did and looked the American people in the eye and knew that this news was coming out, that is a catastrophic event in this campaign, because he was presenting a case of satisfaction and optimism. And the question is: Did the president know that we were going to have this historically high increase that was going to be foisted on citizens the next day?

MS. MATALIN: And this is the problem with this campaign. The senator himself has called, in a span of one week, so says The Washington Post, a liar, lazy, lacking values. Since his convention, they--his surrogates have called him a racist, a fascist, a Brownshirt, a book burner, a bean bag, a bean brain and now an alcoholic. If they would spend one-tenth of 1 percent of the time...

MR. CARVILLE: I...

MS. MATALIN: ...giving some sort of rationale...

MR. CARVILLE: I...

MS. MATALIN: ...to the Kerry candidacy as they do attacking President Bush and Vice President Kennedy--or Cheney...

MR. CARVILLE: Let me be clear. I didn't call him anything. I said, if he knew and gave that speech, that is a catastrophic event in the campaign.

MR. RUSSERT: Isn't this problem, with incumbents running for re-election, Mr. Carville? In 1956, Dwight Eisenhower won by 15; '72, Nixon by 23; Carter lost by 10; Reagan won by 18; Bush lost by 6; Clinton won by 8. Generally, when an incumbent's running for re-election...

MR. CARVILLE: I'm not sure this is going to be, either. I'm not sure. And I think...

MR. RUSSERT: Well, in March of 2004...

MR. CARVILLE: Right.

MR. RUSSERT: ...you predicted John Kerry 52, George Bush 47...

MR. CARVILLE: I did.

MR. RUSSERT: ...Nader 1 on this program.

MR. CARVILLE: Right.

MR. RUSSERT: You stand by that?

MR. CARVILLE: Yeah. I mean, I think it not--what I--the reason that I've become a little more optimistic is I think that Senator Kerry, and I think the people in this campaign, are recognizing the problem. I think you're going to see that problem being addressed early this week. I think Senator Kerry's already changed from this August strategy, which is--let's just say that it was a--mistakes were made, and we're moving on. And I think if that happens, I think this thing is going to come back, and I think people are dissatisfied that this administration is so satisfied with things.

MS. MATALIN: Record of achievement: Restructure the government to fight the global war on terror, and he has an agenda for America where he has a clear vision of where he wants to lead America; 52-47 Bush-Cheney.